iBiquity: Stations Want More HD Radio Sales

[Carmine5]

This the title of a puff-piece interview with Bob Struble on the TWICE website.

http://www.twice.com/article/456471-iBiquity_Stations_Want_More_HD_Radio_Sales.php

What caught my eye was this statement:

"Although only 2,085 stations have converted out of 13,000, the converted stations operate in markets with 85 percent of the U.S. population and account for more than half of all daily radio listenership, Struble said. In terms of ad revenues and listenership, “4,000 stations matter, and we have 2,000 of them already,” he said."

What Struble neglects to mention is that most of these major market stations running IBOC are attached to large radio companies who have invested heavily in Ibiquity. It can also be seen as a veiled admission that small market radio, which has been the slowest to adopt HD Radio and can often ill-afford to do so, doesn't much matter to Ibiquity anyway.

 

[Savage]

I'd be careful with THAT argument, "Baghdad Bob" Struble.

I would venture to say that small-market radio so cavalierly dismissed by iBiquity means a lot more to their communities than HD Radio does.

Or weren't you interested in having people actually buy HD receivers outside major markets? You know: the big cities where people ALSO aren't buying HD radios....?

The "HD stations cover 85 percent of the population" is like me suggesting my station has "over a million listeners" because my daytime 5 mv/m covers 1.4 million people and 98% of people listen to radio on a daily basis.

So...alla KAZAM! We have 1.2 million listeners, Q.E.D.! Right???

Give me a break. This is just another stupid-tricks-with-statistics like braying publicly about "chipsets shipped" when you have no positive news about actual receiver sales. So stations in HD cover 85% of the population. So what??? How many people are actually listening in digital? Or know? Or care??? :

(Meanwhile....in Switzerland........)

 

[TSL2]

" 85 percent of the U.S. population and account for more than half of all daily radio listenership, Struble said.

You silver tonged devil!

While this is true HD operates in markets stated above. And the Bla, bla and bla, bla and blickly blick are all very true.

Hd's share of audience is so small, it doesn't matter.
Build and they will come, I guess not!

 

[TheBigA]

What Struble neglects to mention is that most of these major market stations running IBOC are attached to large radio companies who have invested heavily in Ibiquity.

I think the amount of actual investment is greatly over-stated. I think the largest percentage of investment has been "in-kind," namely the excess inventory campaign, and the content support. But I don't think a whole lot of cash has been invested. Certainly not in the last 5 years. The last time iBiquity needed an infusion of dollars, they didn't get it from anyone in the Alliance.

In my view, as an outsider to these proceedings, I think the problem in this is it's all centered around one company: iBiquity. They have done their dog & pony show for CE companies many times before, and they know they're dancing in front of an industry that is bored with the show. That situation has to change in a substantive way for progress to be made. And I don't think iBiquity has the stones to make the kind of change necessary to move the ball. That's just my view as an outsider. What I have wanted them to do is be more inclusive and less exclusive in their licensining. And they don't want to do that. I feel that will ultimately be their downfall.

I believe Strubel is telling the truth when he says the stations want to see more eggs. They are not going to spend any more, divert any more time or attention, or do anything else for HD Radio until there is some tangible reason for them to do so. And I have no reason to believe there WILL be any reason any time soon. The ONLY thing that will change the current situation is for iBiquity to sell or merge with another more credible company in the electronics industry. I don't know of any company interested in doing that with them, and therefore, I see no reason that they will be able to move the ball further down the field, or produce the "eggs" the radio stations want to see. They have deals with car companies, and the car companies haven't been forthcoming in delivering. They have deals with retailers, and those retailers (perhaps other than Best Buy) haven't been as dedicated as they expected. And they have deals with manufacturers, and we see the results in sales of radios. So that's it. Unless something substantive happens in the next 2-3 years, things are the way they'll be.

 

[davideduardo]

What Struble neglects to mention is that most of these major market stations running IBOC are attached to large radio companies who have invested heavily in Ibiquity.

The investments by about a dozen radio groups were made a decade ago and ammounted to seed capital to assist in securing private equity investment. None of the investments was very significant and were reported to be less than the equivalent of a half a percent of one year's billings for any of the groups. In exchange, they were afforded some concessions on licensing IIRC.

Overall, the investments were very minor.

 

[TheBigA]

In fact, in terms of actual money, CC was a far greater investor in XM than iBiquity. And they got a whole lot more out of it. But you never read of anyone describing CC as being "heavily invested" in XM. Because it never happened. Even less with iBiquity.

 

[local oscillator]

I've got a great idea for the next bazillion dollar HD Radio excess inventory ad campaign: "HD Radio Heard Here." Kinda catchy! That would work really well, er, if it were true, and, um, if anyone cared.

 

[Savage]

Or if HD Radio were likely to "be heard." The signals are, generally, a tough catch in many markets. When you can acquire them, they don't stay. When they don't stay, the digital is often out of time-sync with the analog. Most listeners can't hear the difference in HD-FM between analog and digital, particularly in vehicles. Listeners can hear the difference between the two in HD-AM, but many people think the digital is actually WORSE, and the coverage in the AM flavor is much, much smaller than the analog. Fewer than two radio stations PER STATE are on with HD on AM 24-7.

The HD subs are unreliable unless there are ideal transmitting and receiving conditions. And when the subchannels drop there is no analog backup - just silence.

But it all doesn't matter because consumer-friendly receivers are not widely available.

And the system has got to one of the most universally disliked engineering developments in the industry's history. So the personnel involved are obstructive to its implementation and maintenance. HD Radio's "boots on the ground" are typically kicking it in the shins.

I find myself in the odd position of agreeing with The Great Outsider, TheBigA. It's going nowhere.

 

[Savage]

It is correct that most of the promotion of HD Radio has been "in kind" (in other words, spots the stations couldn't sell.) They still do have value, however. On-air inventory is what we sell to earn a living.

I actually think the relentless on-air flogging of HD has been bad on multiple levels simultaneously. Radio leaders need to look at the issue like someone from outside the industry.

First, the endless hype makes Radio look desperate. I was dismayed when the NYSBA launched a statewide campaign to "fight satellite radio." It sounded idiotic, and we refused to run the promos. It was like having McGruff The Crime Dog earnestly warning listeners to be alert for dangerous elderly women pushing walkers. Fragmentation of terrestrial audience by XM-Sirius is not a real-world problem, so the whole concept was silly.

Second, doggedly promoting a system which is known to be seriously defective makes media buyers wonder if radio knows what it's doing. I know many, many advertisers - direct and agency - who wag their heads over HD Radio promotion. The concept is wrong, the creative is
asinine, and the more it continues, the more there is a tendency to regard radio as a media choice which is antiquated and run by incompetents.

Third - the worst of all - since HD continues to stiff in the face of relentless on-air promotion, the implicit conclusion being drawn in media circles is, "radio advertising doesn't work." This isn't true, but HD's incessant on-air promos pose a growing risk that this perception will spread.

In every way, every day, HD is hurting radio. It's the worst idea in the history of the medium.

 

[davideduardo]

Listeners can hear the difference between the two in HD-AM, but many people think the digital is actually WORSE, and the coverage in the AM flavor is much, much smaller than the analog. Fewer than two radio stations PER STATE are on with HD on AM 24-7.

Yet in Los Angeles, two AMs... only two... out of 34 licensed in the market have nearly 50% of the 12+ shares of total AM listening (7 out of 15 shares) and both have AM HD signals that can be reliable received well outside the LA metro and which have been engineered well and sound very good. Both have overcome initial issues on things like dueling codecs, particularly on cell phone calls or reports, and now have nice presence and "depth" when listened to.

It's no coincidence that these two are non-directional 50 kw stations. Some of the worst HD I have heard comes from complex directionals.

It's obvious from listening that on the good signals HD sounds good and has adequate range. But there are so few good signals that one wonders whether, if the only benefit is to a few stations nationally, this is a productive thing for AM to do.

 

[Savage]

And then are essentially no radios. Almost all of the recent entries for HD receivers, the ones with any notable sales, have been FM-only.

 

[local oscillator]

The ridiculous HD harangue has indeed hurt us. Radio cost-effectively sells better than any other medium, but as we tell our clients - their product has to be worthy (quality product, appropriately priced, good customer service, etc.). When the pro-HD portion of the radio industry puts our reputation on the line selling a junk product like HD Radio, we are all diminished in the public's eye. The HD Radio on-air campaigns bolster the perception that "Radio doesn't work," when just the opposite is true.

 

[TheBigA]

When the pro-HD portion of the radio industry puts our reputation on the line selling a junk product like HD Radio, we are all diminished in the public's eye.

I really don't think "the public's eyes" are even aware. You're over-stating the effect of a campaign that largely falls on deaf ears.

And I don't know of any on-air talent that have used their status to promote HD radio.

Radio leaders need to look at the issue like someone from outside the industry.

You're unfortunately not qualified to perform that function.

 

[local oscillator]

When the pro-HD portion of the radio industry puts our reputation on the line selling a junk product like HD Radio, we are all diminished in the public's eye.

I really don't think "the public's eyes" are even aware. You're over-stating the effect of a campaign that largely falls on deaf ears.

And I don't know of any on-air talent that have used their status to promote HD radio.

I agree that much of the HD Radio campaign falls on deaf ears; the general public ignores it, is confused by it, or misinterprets it. I also agree that on-air talent wisely don't talk about it -- unless coerced. They know they need to stay relevant, and talk of HD Radio doesn't move the ball forward. I do, however, think that advertisers and ad agencies have been paying attention, and they are not impressed.

 

[davideduardo]

I agree that much of the HD Radio campaign falls on deaf ears; the general public ignores it, is confused by it, or misinterprets it.

... just like they ignored or were confused by FM for 27 years until the FCC essentially mandated the creation of lots of new programming.

I do, however, think that advertisers and ad agencies have been paying attention, and they are not impressed.

Agences pay attention to metrics (CPP, Rating, Grips, etc), value added and such. They are not even going to put HD on the radar until there are numbers to negotiate and buy... until then, it's simply a non-issue, neither positive nor negative.

It's no different than this:

Seller: we just increased our power to triple the old power!
Buyer: when you can show me triple the listeners, come back and we'll talk.

 

[BRNout]

I agree that much of the HD Radio campaign falls on deaf ears; the general public ignores it, is confused by it, or misinterprets it. I also agree that on-air talent wisely don't talk about it -- unless coerced. They know they need to stay relevant, and talk of HD Radio doesn't move the ball forward. I do, however, think that advertisers and ad agencies have been paying attention, and they are not impressed.

Yep, in my experience, the general public either ignores the HD radio ads or becomes confused by them. As in "gee will radio do like TV and require us to buy a new one?" But, frankly, the latter group is small because they are among the few who actually pay attention. Even the audiophiles that I know are not interested in HD radio; they don't consider it compelling.

OK, here's a real-time anecdote: as I type this, I am in my office with an unobstructed view of the Sears Tower. It's only 3 miles away. And, I sit here with my Insignia portable HD radio tuned to WLS-FM HD2. I just moved my arm and lost the signal for about a minute. Went from talk to silence just like that. When it is working, the feed is full of digital artifacts like a 16 kb/sec internet stream. After a while, the advantages of clarity are overcome by fatigue and I find myself reaching for my other little radio with AM to tune 890. Though not in stereo, it actually does sound more pleasant. And it never just drops out....unless the batteries die.

That, in a nutshell, is the problem with HD. There's little value in it to the average consumer. And, in most markets, there are few additional formats of interest to most listeners. In Chicago, most of the HD2s are either extensions of the main format or are feeds of co-owned AM stations. At least some of the Milwaukee stations are more original with blues, REAL oldies and a great urban a/c format offered. But that market is more the exception than the rule. And the areal reach of those feeds is pretty limited anyway - with all the drop-outs that you have to endure.

 

[davideduardo]

And then are essentially no radios. Almost all of the recent entries for HD receivers, the ones with any notable sales, have been FM-only.

Appropriate, since I note that any mention of AM or the dial position has been removed from your station's home page. It's all FM now.

 

[local oscillator]

Agences pay attention to metrics (CPP, Rating, Grips, etc), value added and such. They are not even going to put HD on the radar until there are numbers to negotiate and buy... until then, it's simply a non-issue, neither positive nor negative.

David, you missed my point. The HD Radio on-air campaign didn't move the needle on HD Radio sales. It's my opinion that many advertisers and ad agencies incorrectly see that as a failure of radio as an advertising medium, not a failure of the snake oil (HD) that it was trying to sell. I can certainly envision ad agency execs saying, "Radio can't even sell itself, how can we expect them to sell cars." HD is a problem on so many levels.

 

[RadioMan203]

David, you missed my point. The HD Radio on-air campaign didn't move the needle on HD Radio sales. It's my opinion that many advertisers and ad agencies incorrectly see that as a failure of radio as an advertising medium, not a failure of the snake oil (HD) that it was trying to sell. I can certainly envision ad agency execs saying, "Radio can't even sell itself, how can we expect them to sell cars." HD is a problem on so many levels.

L.O., I think you bring up a great point on radio selling itself (or the HD concept), part of which I touched upon in my Radio World commentary entitled HD Radio Faces Rocky Road. Many people hear radio stations talk about their HD signal and some think their own radio is HD! I was at a chain retailer where the young sales person pretty much said "they say it all the time, right?" referring to the station's hourly ID which mentions their HD-1 identification. Consumer awareness (or lack thereof) is one of many reasons why HD is stuck at the starting lines.

I remember back in the 80's when AM Stereo first left the gate. The station I would eventually engineer gave away boatloads of Sony SRF-A1 Walkman™ radios as part of their promotions. I don't see that happening with HD. I also don't see many people fell compelled to go out and buy yet another radio. Face it, I think HD is a solution to a problem nobody cares about. It's not needed to listen to radio and the extra programming found on the sub-channels can be blown away by most any internet webstream - content will not save the likes of HD Radio.

If radio stations program quality content people will listen and they won't give a rat's pa-toot if it's in HD or analog. And please, don't get me started on how HD pretty much tanked DXing on either band.

 

[TSL2]

Seller: we just increased our power to triple the old power!
Buyer: when you can show me triple the listeners, come back and we'll talk.

Seller: We are now broadcasting in HD
Buyer: What's that?

Seller: It's radio's new digital format
Buyer: I tired radio once and it didn't work

Seller: you didn't try my new HD station!
Buyer: Ok I'll listen tonight on my way home

Seller: Did you listen?
Buyer: Are these stations on my radio dial?

Seller: you need to buy a new HD radio!
Buyer: can't I just buy regular spots on your station. I'm not buying a new radio.

Seller: Sure
Buyer: That price is high, I told you before I tried radio once and it didn't work.

Seller: How did you know it didn't work?
Buyer: nobody mentioned your station.

Buyer: with all these stations I can't afford radio advertising.. I'm just going to use facebook.


Seller: Hey we have new HD stations now:
Media buyer: Let me look at your numbers.
Oh I can't find any numbers. If I place an annual on your station can I get HD for free?
We need promotions, and free remotes.
Get your proposal to me today by 5pm
And we don't buy unrated stations